Poor old DonDiego's a-gonna be an awfully old man by 2035, . . . but some interested readers might not be. If'n they's a-been countin' on Social Security maybe they'd better start countin' on somethin' else.
Ref: Social Security's Funding Crisis Has Arrived
[a summary in 3 select paragraphs - DD]
The fund’s Trustees noted in an April report that net inflows into the Trust Fund will turn negative next year, commencing a demise that will see the Trust Fund go broke in 2035. Then, payroll taxes will cover only 79% of promised retiree benefits. Here’s the troubling part: “The projections and analyses in this year’s report do not reflect the potential effects of the Covid-19 pandemic on the Social Security program,” the Trustees stated in the annual report. Clearly, benefits will increase as more workers retire early or claim disability while payroll taxes swoon with the drop in employment.
The Trust Fund Trustees state that ensuring solvency over the next 75 years would require a 3.1- percentage point rise in the 12.4% current payroll tax that is split between employees and employers. Even less politically attractive would be an immediate 19% across-the-board cut in benefits. Waiting for the Trust Fund money to run out in 2035 would require a 4.1-percentage-point rise in the combined payroll tax or a 25% cut in benefits, the Trustees calculate.
If self-funded Social Security benefits are an entitlement that is no longer affordable, so too are state pension fund benefits. Decades of lush retiree benefits, overly-optimistic investment return assumptions, insufficiency pension fund contributions and lengthening retiree life spans have resulted in the liabilities of public pension funds exceeding assets by $1.2 trillion in 2018, according to the latest data and Pew Charitable Trusts. The pandemic will surely worsen the mismatch.
[Boldface added - DonDiego]
Ahh, . . . Big Government promises lead to Big Government problems.
